Introduction
Imposed by governments, business principles have been introduced, with managed competition, in healthcare markets to stimulate the efficient use of scarce resources with corresponding reimbursements (Shmueli et al., Reference Shmueli, Stam, Wasem and Trottmann2015). Managed competition has emerged, at varying speeds, in countries such as the United Kingdom, Sweden, Finland, Germany, Italy, New Zealand, the United States, and Switzerland (Kankaanpää et al., Reference Kankaanpää, Linnosmaa and Valtonen2011; Reynolds et al., Reference Reynolds, Attaran, Hervey and McKee2012; Nicholls, Reference Nicholls2017). Since 2006, managed competition also has been introduced in the Dutch healthcare market.
Dutch physiotherapy primary healthcare organisations (PTPHOs) must adjust to managed competition in order to achieve quality, efficiency, and financial outcomes. It is not only overall technical quality outcomes that represent physiotherapy primary healthcare organisation (PTPHO) quality based on professionals guidelines that need to be attained but also the overall patient perceived quality outcomes like patient satisfaction. In addition, financial outcomes need to be attained such as profit for reinvestment in the organisation (IJntema et al., Reference IJntema, Barten, Duits, Tjemkes and Veenhof2021).
To sustain superior performance, PTPHOs must be able to respond to changes in and pressure from their external (managed competition) environment. This pressure can be caused by (inter)nationally imposed healthcare quality aims such as being equitable, effective, efficient, timely, safe, and patient-centred (Institute of Medicine, 2006; Ministry of Health, Welfare and Sports, 2016). These aims stimulate organisations to change towards low-cost, high-standard accountable care, which includes cost-effective standardisation of services. Organisations are also prompted to respond to changing local and patient-context-specific needs. To do so, customised patient support needs to be organised in the community in collaboration with local stakeholders (Jewell et al., Reference Jewell, Moore and Goldstein2013; Taskfore juiste zorg op de juiste plek, 2018; World Health Organisation, 2018).
While the alignment of the PTPHO’s external environment is challenging, so too is the alignment of their internal organisation. The alignment of a PTPHO’s internal organisation is characterised by personalised management approaches and flexible informal ways of working. Dutch organisations may experience financial pressure since their turnover increased by 56.7 per cent over a 10-year period, while their profit remained nearly unchanged (CBS, 2019). In the Netherlands and internationally, PTPHOs are small and have limited resources to respond to change (Sternad et al., Reference Sternad, Krenn and Schmid2017; United States Census Bureau, 2018; CBS, 2020).
To support the alignment of the PTPHO’s external environment and internal organisation, and to attain and sustain superior performance, business model-building and model-changing is necessary (Schneider & Spieth, Reference Schneider and Spieth2013; Achtenhagen et al., Reference Achtenhagen, Melin and Naldi2013; Wirtz & Daiser, Reference Wirtz and Daiser2017). Business model-building means a one-time organisation-specific configuration of the elements and interactions between these elements that an organisation chooses to attain superior performance (Geissdörfer et al., Reference Geissdörfer, Vladimorova and Evans2018). Examples of business model elements are patient population, treatment service, physiotherapy staff, physiotherapy equipment, key partners, and financial costs and revenues. Changing a business model also makes it possible to sustain superior performance in a changing environment. To date, however, the business model literature lacks discussions on building and changing business models related to attaining and sustaining performance outcomes, specifically in a changing PTPHO context (Schneider & Spieth, Reference Schneider and Spieth2013; Foss & Saebi, Reference Foss and Saebi2017). Therefore, the research question for this study is: What business model-building and model-changing aspects make PTPHOs attain and sustain superior performance in a changing environment, according to their managers?
Methods
The consolidated criteria for reporting qualitative research have been adhered to (Elsevier, 2019).
Design
This study adopted an explorative qualitative approach. The expert area of building and changing business models related to attaining and sustaining superior performance was explored. The approach was selected because if the business model literature is not fully developed, qualitative work allows for the identification of new elements and concepts. Another factor that necessitated qualitative work was that the study was conducted in a new context: PTPHOs that perform in a changing healthcare market, aligning the external environment and internal organisation.
Participants
The primary subject of this study was the PTPHO manager. General announcements of the current study during three Dutch physiotherapy conferences were applied to recruit managers of Dutch PTPHOs for voluntary participation. No financial inducements or other forms of persuasion were offered. To be purposefully included in this study, these potential participants indicated their level of performance based on a self-perceived instrument (see Appendix I for more details). The instrument consisted of three performance parts: outcome of overall technical quality, overall perceived quality by the patients, and financial metrics (IJntema et al., Reference IJntema, Barten, Duits, Tjemkes and Veenhof2021).
Procedure
Single semi-structured, audio-recorded interviews with PTPHO managers were conducted by the primary author at a time and place that was convenient for these managers between April 2018 and March 2020. Prior to the interviews, the selected managers were informed about the primary author’s academic position in physiotherapy and the business administration domain. Also, the research question and the nature of PTPHO performance outcomes were explained. At the beginning of the interviews, the written response on the self-perceived instrument was explored and verbally confirmed by the participating managers. Subsequently, the interviews followed the pre-defined interview guide based on business model theory described by Wirtz and Daiser (Wirtz & Daiser, Reference Wirtz and Daiser2017). The interview guide topics included business model configuration, the value proposition to patients, and exploitation of information (see Appendix II for more details). To assess the appropriateness of the questions, the interview guide was piloted by the primary author in two PTPHOs. Field notes were made during the pilot tests.
Data analysis
The interviews were transcribed verbatim and returned to the participants for comments or correction. The transcripts were analysed in random order using directed content analysis. The goal of a directed content analysis is to validate or conceptually extend a theoretical framework or theory. New codes can be given if initial codes are insufficient. Saturation will be reached when no additional codes are found (Hsieh & Shannon, Reference Hsieh and Shannon2005). Theory on business model-building and model-changing guided the current discussion of findings (Wirtz & Daiser, Reference Wirtz and Daiser2017). To prevent bias, both the first and second authors of this study independently analysed 12 out of 25 transcripts. Both authors were specifically trained in conducting qualitative research. The first and second authors held discussions until agreement was reached on topics. For literal replication (Yin, Reference Yin2018), these findings were compared with the 13 remaining transcripts by reading the interviews. In the end, for theoretical replication, the interviews with managers representing superior performance organisations were compared with the interviews with managers representing lower performance organisations (Yin, Reference Yin2018). ATLAS.ti version 8.4.15 (www.atlasti.com) was used.
Findings
In total, 25 managers of PTPHOs were interviewed. Based on a written email response, by filling in three boxes labelled superior, 20 managers indicated their organisation as one that has ‘superior performance’. Another five organisations did not attain exclusively superior scores on those outcomes and were indicated as ‘lower performance’ organisations. None of the included managers refused the interview or dropped out. The interviews lasted between 34 and 63 min. Table 1 shows the characteristics of included organisations – as in the number of owners, employed physical therapists, and employed office staff – separately for organisations with superior and lower performance. No prior relationship was established between the interviewer and the managers of the PTPHOs. Superior performance organisations mostly employ six to ten physical therapists. Lower performance organisations employ one to five physical therapists. In addition, almost half of the organisations employed disciplines other than physical therapist or staff, mostly personal trainers and exercise therapists (not shown in Table 1).
Characteristics of included PTPHOs
After completing all interviews, four overarching topics incorporating 11 minor topics were derived from the data, covering the vast majority of the selected quotes for this study. Three of the major topics relate to business model-building blocks: business model configuration, interfaces, and strategy. One relates to specifically changing business models: change cycles (Table 2). All topics were consistent with prior business model literature. Saturation occurred after analysing seven of the 20 interviews with managers representing organisations with superior performance. Detailed data on the derived topics are available from the authors upon request.
Major and minor topics for building and changing business models
Major topic 1: business model configuration
Managers representing superior performance organisations stressed the importance of a value delivery constellation. This is an organisation-specific plan for the integral coordination of all business model aspects to attain superior performance. This includes revenues and costs, and collaboration with internal staff and external partners based on equivalence and mutual benefit. Attention is given not only to balancing the PTPHO’s overall performance but also to keeping the individual patients’ needs in mind:
Manager 7 (superior performance PTPHO): ‘We hired a company with a personal trainer and lifestyle coach to develop activities for our vitality pillar. Last year we stopped this collaboration. I realised I would receive less rent and collaboration fees. The therapists in my organisation asked: what are we doing? Lifestyle behaviour change of patients was promised but not realised by this company’.
By contrast, managers of lower performance organisations reported that their value delivery constellation was insufficient. Their integral coordination of business model components was lacking. Explanations were sought regarding limitations in financial incentives and resources, or not making full use of these resources:
Manager 2 (lower performance PTPHO): ‘I want to be able to say this is where we are heading, this is the current situation. In my view, we still need to reach this point, because financially we are not healthy yet. Also, we need extra physical therapists’.
The managers of superior-performing organisations also pointed at investment in selected key partners based on a shared concern and a positive long-term relation and short lines of contact:
Manager 1 (superior performance PTPHO): ‘Investment in time in all those networks. I think this is a quality promotion too’.
Managers of lower-performing organisations reported that their key partners are limited and hardly support the PTPHO:
Manager 4 (lower performance PTPHO): ‘We do not yet have a good relationship with the family physicians’.
To fully stimulate performance, managers of superior-performing organisations also invest in key resources. Aspects that are considered important are the support of a team with mixed talents, attention to employee satisfaction, investment in facilities, and heavy investment in staff training:
Manager 4 (superior performance PTPHO): ‘Always heavily invested in people, in staff. A very large education budget’.
By contrast, the managers of lower-performing organisations argued that investments are risky because their limited key resources cause a limited turnover and vice versa. They plan and try to build key resources, but these are either unsatisfactory or being worked on:
Manager 3 (lower performance PTPHO): ‘This is the problem of wanting to hire someone without having the financial resources because we don’t have a buffer. At the same time, without hiring someone new we can’t increase turnover’.
Superior-performing organisations mention that their business model configuration also includes a value proposition, which entails a proposed solution to the patient’s needs. This proposition encompasses a well-organised contact between well-trained therapists, staff, and patients. This contact is based on courteousness, sincerity, and service with a smile. Concurrently, value is proposed to the patient by medical care, complemented with care and welfare support for the local community. Examples are prevention, health stimulation, vitality, and self-management:
Manager 3 (superior performance PTPHO): ‘Well, I want to move away from pathologies. We focus on what is needed in well-being, much more in the pre-care than in the care phase’.
Lower-performing organisations also propose value. However, some managers report that the value propositions made by their therapists towards patients are vague. This is because the organisation’s therapists have a hard time to predict the probable course of an ailment. Furthermore, these propositions consist of medical care that tends to be a mono-disciplinary approach. These managers wish for inter-professional and integral care collaboration:
Manager 1 (lower performance PTPHO): ‘Then I want to know from my therapists how many appointments it approximately will take to reach a patient’s goals. They simply can’t describe. Patients don’t know what they will get’.
Major topic 2: interfaces
Interfaces between their external environment and internal organisation enable PTPHOs to exploit external environment and internal organisation information in the short term.
Interviews with managers of both superior and lower performance organisations revealed various evaluative techniques and tools to exploit external environment and internal organisation information. For example, the managers mentioned frequent internal management and team meetings and external stakeholder/network meetings in an open atmosphere. These meetings were either formal or informal. Markedly, the managers of superior performance organisations specifically reported the involvement of the entire organisation during their internal meetings. Also, their external meetings were mainly inter-professional organised at local, regional, and national levels. By contrast, the managers of lower performance organisations organised mainly mono-professional meetings, either at local or regional levels. Besides, unlike the lower performance organisations, the superior performance organisations regard being in touch with the community as an important tool to exploit external environment and internal organisation information. Additionally, possessing an organisation’s dashboard with real-time integral data on external environment and internal organisation information is key for evaluating the PTPHO’s performance.
Another interface that managers of both superior- and lower-performing organisations identified as being useful for information exploitation was action. Managers of superior performance organisations report that their organisation acts on an occurring opportunity, change or problem. This action is either planned or unplanned. Also, the action deliberately varies from limited to full commitment, in terms of efficiency. Ultimately, the action results in information they can exploit:
Manager 7 (superior performance PTPHO): ‘At a given moment, together, you must make progress through concrete action. As long as we talk about the fact that we will do things, nothing happens’.
Managers of lower performance organisations also mentioned that planned and unplanned action results in information they can profit from. However, they articulated less initiative and varying commitment in terms of efficiency.
The managers of superior-performing organisations report that they process and make sense of knowledge and information. Furthermore, these managers report that they exploit this information to contemplate products, choices, opportunities, and avoidance of problems and to make short-term adjustments to plans:
Manager 2 (superior performance PTPHO): ‘You should know in which direction the profession evolves, what stakeholder policies are, and make sure you are pro-active based on conscious choices and that you will not let yourself be surprised’.
Managers of lower performance organisations apply to this process and make sense of knowledge and information interface, only to a certain extent.
Major topic 3: strategy
A strategy is a plan of action to achieve long-term organisational goals. Strategic alignment is regarded by the participants as long-term alignment of the external environment and internal organisation with the organisation’s strategy. The managers of superior performance organisations urged on forecasting and testing future scenarios at a measured and prudent pace. They also mentioned a structural investment in the alignment of the internal organisation. In the wake of the organisation’s purpose, an evaluation takes place regarding positioning, mission, vision, goals, responsibilities, management, the team, and daily activities. Furthermore, long-term alignment of the external environment with the organisation’s purpose was mentioned as a distinctive feature; for example, involvement in policy development and structural investment in external stakeholders:
Manager 2 (superior performance PTPHO): ‘So I am already planning to organise an allied healthcare entity in the same catchment area as the family physicians. We align with the physiotherapy, but also with the dietetics and the pharmacist, so you can discuss, together, policy matters with the local governments’.
Lower performance organisations disclosed that their long-term activities in reaching strategic alignment appear to be problematic and less structural:
Manager 5 (lower performance PTPHO): ‘I need to learn to think in terms of long-term activities. So far, I never really worked on these activities’.
Figure 1 presents the three major topics regarding business model-building. Another major topic has a specific focus on evolving from a one-time business model configuration through business model-building to changing business models, namely change cycles. According to both superior and lower performance PTPHO managers, changing business models is a prerequisite for sustaining superior performance. The major topic change cycles will be explained below.
PTPHO building and changing business model framework
Major topic 4: change cycles
Three change cycles were derived from the study results. These cycles enhance a continuous fit between strategy, business model configuration, interfaces, and PTPHO performance.
The first cycle concerns business model change and consists of interfaces and business model configuration. The interfaces encompass evaluative techniques and tools, action, and process, and make sense of knowledge and information. So too, these three interfaces need to be put in use by the PTPHO to exploit their external environment and internal organisation information. This exploitation enhances a continuous change and optimisation of the PTPHO’s business model configuration. Superior performance organisations seem to complete business model change full circle and avail the interfaces and business model configuration adjustment possibilities:
Manager 4 (superior performance PTPHO): ‘Sometimes these things happen very swiftly. We try to place these in a structure while at the same time we are overruled by new occurrences every day that must be promptly addressed. In a way, it’s a challenge to composedly find a structure for this. Ad-hoc and planned’.
By contrast, concerning business model change managers of lower performance organisations report an intention to go full circle, but their organisation still seems to be preparing for a sufficient approach.
Short-term change represents the second change cycle. This cycle enables an organisation to learn from the short-term effects of business model change on its PTPHO performance. For example, this means that performance outcomes can inform the PTPHO manager about the effectiveness of the PTPHO business model adjustments. Furthermore, these outcomes can be evaluated and ultimately lead to a newly aligned PTPHO business model configuration. Superior performance organisation managers report that they act on this change cycle. Managers of lower performance organisations report that going through this short-term change cycle is hampered:
Manager 1 (lower performance PTPHO): ‘We share our success insufficiently, not externally nor internally, so this is quite a thing. But now we intend to do a quarterly evaluation, instead of bi-annually’.
The third cycle, long-term change, enables an organisation to learn from the effect of long-term investments in the strategic alignment of the external environment and internal organisation, with the organisation’s performance outcomes. In addition, managers of superior performance organisations report they protect the organisation’s mission, vision, values, and core purpose, despite tempting opportunities:
Manager 2 (superior performance PTPHO): ‘I have my own vision and values, and that’s what I hold on to’.
Contrastingly, managers of lower performance organisations mention the intention or the recent start to monitor a strategic purpose with their performance outcomes, but seem less experienced or less equipped for this task. They also seem less aware of their values and core purpose, which could tempt them to take opportunities that do not align with the internal organisation.
Discussion
The study results show, both verbally and graphically, that PTPHOs generate superior performance in a changing environment through business model-building and model-changing. Participating managers (n = 25) confirmed extant findings that business model-building consists of strategy and business model configuration. In addition, business model-building entails establishing interfaces to exploit external environment and internal organisation information. In addition, these interfaces are evaluative techniques and tools, action, and process – make sense of knowledge and information. To sustain superior performance, it is essential to change the business model. This can be achieved through three change cycles: business model change, short-term change, and long-term change.
Markedly, managers of both superior and lower performance organisations independently stress the importance of the same set of business model-building and model-changing aspects related to attainment and sustainment of superior performance. However, the way they address these aspects varies widely. Superior performance organisations address building and changing business models in a more diversified and integrated way than their lower performance counterparts.
Prior business model literature has broadly classified building and changing business models into two groups: one in terms of change in mental models or managerial conceptualisations and the other concerning the actual alteration of an organisation’s activities (DaSilva & Osiyevskyy, Reference DaSilva and Osiyevskyy2019). The current study complements this insight by indicating that superior performance not only requires the processing and making sense of knowledge and information but also action and evaluative techniques and tools (Andries et al., Reference Andries, Debackere and Van Looy2013; Berends et al., Reference Berends, Smits, Reymen and Podoynitsyna2016; Wirtz & Daiser, Reference Wirtz and Daiser2017). This resembles the experiential learning theory described in business model literature. This theory comprises a conceptualisation, action, and evaluation cycle to sustainably reach superior performance outcomes (Kolb, Reference Kolb1984; Gavetti et al., Reference Gavetti, Levinthal and Rivkin2005; Chikweche & Bressan, Reference Chikweche and Bressan2018). On one hand, in line with the results of the current study, conceptualisation starts with a cognitive search. For example, the development of a preconceived business model configuration. Ultimately, when this conceptualisation is brought into action, this generates new information. The new information can be evaluated and exploited for business model change purposes (Andries et al., Reference Andries, Debackere and Van Looy2013; Berends et al., Reference Berends, Smits, Reymen and Podoynitsyna2016). On the other hand, the action starts with doing, for example, engaging in a stakeholder network or starting a pilot project. Yet, this action generates new information, which can again be evaluated and exploited for building new business model configurations.
Study strengths and limitations
A point for discussion is the self-reported instrument for purposive sampling of PTPHO managers that was used for the current study. This instrument was based on one conducted literature review that theoretically discussed a coherent set of performance outcomes for PTPHOs, but has not been validated for the PTPHO context yet. However, to the knowledge of the authors of the current article no other PTPHO context-specific instrument was available at the time of use.
This study also has certain strengths. To the best of our knowledge, the literature has not previously described the linking of building and changing business models, with a coherent set of PTPHO performance outcomes. Based on the present study, knowledge about building and changing business models potentially becomes manageable and relevant for PTPHOs. Another strength of this study is its systematic rigour. Prior to the interviews with managers of PTPHOs, a pilot-tested deductive interview guide was derived from business model literature and applied to a bounded PTPHO context to link theoretical and empirical insights. Besides, the interviews were checked by the participants and analysed by two authors. A further strength of this study is the application of literal replication (Yin, Reference Yin2018). Twelve out of 25 transcripts were compared with the remaining 13 transcripts by reading the interviews. Consequently, the generalisability of the model was improved. For theoretical replication, five lower performance organisations were analysed and compared with superior performance organisations (Yin, Reference Yin2018).
Implications of this research
The current study has several implications for both management practice and research, which are worth unravelling through a building and changing business model lens in various healthcare contexts. It is desirable to have real-time data through the use of various evaluative techniques and tools as an interface between the organisation’s external environment and internal organisation. It is beneficial to proactively engage key staff and partners in creating value delivery constellations and value propositions. Furthermore, it is advisable that PTPHOs stick to a long-term strategy and put effort into aligning their external environment and internal organisation to this strategy. To ensure business model change in the light of superior performance sustainment, the organisation must carry out diverse activities, such as processing and making sense of knowledge, and adjustments to information, action, evaluation, and business model configuration. To safeguard PTPHO superior performance outcomes for the future, the results of the current study could potentially be included in physiotherapy education, clearly involving medical and business principles. Further insights into this matter are needed in business model literature and in various empirical contexts. This is because, to date, the business model literature has lacked discussions on the impact of building and changing business models on superior performance outcomes. Developing cross-sectional and longitudinal quantitative surveys based on the framework of the current study could help gain validity and generalisability.
Concluding remark
The study results verbally and graphically show PTPHOs generate superior performance in a changing environment through business model-building and model-changing. Managers of both superior and lower performance organisations independently stress the importance of the same business model-building and model-changing aspects related to the attainment and sustainment of superior performance. However, superior performance PTPHOs address building and changing business models in a more diversified and integrated way than their lower performance counterparts.
Supplementary material
To view supplementary material for this article, please visit https://doi.org/10.1017/S1463423621000840
Acknowledgements
None.
Authors’ Contribution
RIJ Responsible for the research activity planning and execution, D-JB daily supervisor, HD, BT supervisor, CV principal supervisor.
Financial support
This research received no specific grant from any funding agency, commercial or not-for-profit sectors.
Conflicts of interest
None.
Ethical standards
Ethics approval was obtained for this study from the ethical committee research healthcare domain. Department of health studies HU University of applied sciences Utrecht. Written (or Verbal) informed consent was obtained from all subjects/patients. Verbal consent was witnessed and formally recorded.
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